Economics Test with Multiple Choice Questions

1.Economics is primarily the study of
a.economists' roles in the market for stocks and bonds.
`b.the problem of unlimited wants and limited resources.
c.methods to eliminate scarcity.
d.government programs that make the economy grow.

4.A production possibilities curve does not show `a.all the possible combinations of resources that may be used to produce a good. b.the productive capacities of a nation when resources and technology are limited. c.the opportunity costs of one good in terms of another.

d.that in order to increase the production of one good some amount of another good must be foregone.

5.A production possibilities curve will shift in toward the origin if a.resources become unemployed.
b.resources are shifted from consumption goods to capital goods. c.national defense spending increases while spending on entertainment decreases. `d.the population and labor force decrease.

6. The economics problem is essentially one of deciding how to make the best use of a.limited resources to satisfy limited wants.
b.unlimited resources to satisfy limited wants.
`c.limited resources to satisfy virtually unlimited wants.
d.virtually unlimited resources to satisfy virtually unlimited wants.
7.Which of the following is not a basic question that an economic system is supposed to determine? a.what and how many goods and services are produced
b.what quantities of each resource are used to produce each good `c.how to create a markets of buyers and sellers
d.who receives the output after it is produced

8.Which of the following is not a resource?
a.human capital
b.physical capital
c.labor
` d.money

9.Which of the following is the best definition of the demand for good "X"? Demand shows a.how much of X would be bought at the equilibrium price. b.how people's purchases of X rise and fall as their incomes rise and fall. `c.the amounts of X that would be bought at each and any price, assuming other factors (income, tastes, etc.) remain constant. d.how the amount of money people spend to purchase X changes as the price they must pay for it changes.

10.Which of the following is the best description of the law of demand? a.When supply increases, demand increases.
`b.Price and quantity demanded are inversely related.
c.When income increases, the demand for normal goods increases. d.When the price of A increases, the demand for B increases.

11.If the price of A falls, then
` a.the demand for complementary product B shifts to the right. b.the demand for inferior good B shifts to the right.
c.the demand for substitute good B shifts to the right.
d.the demand for A shifts to the right.

12.An increase in the demand for A is caused by
a.a decrease in the price of A.
b.a decrease in the price of a substitute for A.
c.an increase in the price of a complement for A.
` d.a decrease in income if A is an inferior good.

13.If hamburgers and French fries are complementary goods, a decrease in the price of French fries would `a.cause the demand curve for hamburgers to shift to the right. b.cause consumers to decrease the quantity of French fries demanded. c.cause the demand curve for hamburgers to shift to the left. d.cause consumers to decrease the quantity of hamburgers demanded.

14.Which of the following does not indicate an increase in the demand for good X? a.Consumers were purchasing 10 units of X at $3 per unit and now they...

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...﻿BUSN 603 MULTIPLECHOICEQUESTIONS SET PART 2-8
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Final Exam
BUSN 603 MultipleChoiceQuestions Set Part 2-8
Jane wants to set up a photo shop. The cost to rent is $150 per week. The variable cost of making one photo is $20 and she can sell it for $50.
1. Jane has to sell ______ photos per week to break even
2. If Jane sells 10 units ,her profits would be ______ dollars
Paul wants to choose one of the two investments opportunities over three possible scenarios. Investment 1 will yield a return of $10000 in scenario1, $2000 in scenario 2 and a negative return of $5000 in scenario 3. Investment 2 will yield a return of $6000 in scenario 1,$4000 in scenario 2 and zero in scenario 3. The probability 1 is 0.2,for scenario 2 is 0.3 and for scenario 3 is 0.5
1/If you were to choose the investment that maximizes Paul's Expected Money Value(EMV),then you should choose______
1. Investment 1
b.Investment 2
c.Indifferent
2/If Paul is uncertain about the return for investment 1,then this return has to be ____dollars in order to make Paul indifferent between these two investments(i.e two investments would have the same EMV).
Sam has a cleaning service. To better allocate his resources, he would like to forecast his weekly...

...BFIN 515 Economic Analysis
Test 1
Fall 2006
NAME: Answer Key
Number__________________________
Prof. Inbong Kang
ID
5 points each
1. If a 5 percent decrease in price leads to a 10 percent increase in the quantity
demanded, the price elasticity of demand is 2.
2. The opportunity cost of a choice refers to the highest valued activity sacrificed when
the choice is made.
3. The curve that shows the maximum combination of any two products that can be
produced with a fixed quantity of resources is called the
production possibilities curve.
4. The Laffer curve refers to the phenomenon that if the tax rate rises above a certain
level, the tax revenue may fall, not rise, as people may get discouraged from working.
5. Demand curve slopes downward to the right for reasons related to the income effect
and the substitution effect.
6. The area above the actual price paid (the market price) and below the demand curve
is called the consumer surplus.
7. Inelastic demand can best be represented by a relatively {FLAT, STEEP} demand
curve.
8. If a price {CEILING, FLOOR} is imposed, problems such as a shortage and quality
deterioration develop.
9. If the price of gasoline goes up and Amy now buys fewer candy bars because she
has to spend more on gas, this would best be explained by the {INCOME,
SUBSTITUTION} effect.
10. Consider a pizza shop in a college town. As students go home during the summer,
ceteris...

...[pic]
Swinburne University of Technology
(Sarawak Campus)
HBE613
ECONOMICS
Higher Education Division
Microeconomics Test
Term 1, 2013
12.5% of Total Unit Marks (to be marked out of 20)
Time Allowed: 1 hour
Name: ______________________________________
Student ID: ______________________________________
Swinburne University of Technology, Sarawak Campus
Short Answer Questions
There are 4 questions in this section. Each question is worth 10 marks. ANSWER ANY TWO QUESTIONS (2x10=20 marks)
Question 1 (2+4+2+2 =10 marks)
a. Define Production Possibilities Curve.
b. The figure below represents the production possibility frontier for the small country of Bistro, which produces only agricultural products (measured in thousands of tons) and manufacturing products (measured in thousands of pounds):
[pic]
Does the production possibility frontier demonstrate the law of increasing opportunity cost? How can you tell?
c. What happens to a country’s production possibility frontier if it experiences a natural disaster such as a hurricane or an earthquake? Explain.
d. Why are the opportunity costs of an MBA graduate course greater than the opportunity cost of a B. Bus or B.Com undergraduate course?
MBA student is qualified enough to work and earn a salary because he/she Has...

...orders, while the Bank of Japan effectively cut its assessments on exports. The Wall Street Journal, August 13th, 2012.
a) Using the basic Keynesian model, provide a detailed analysis of the likely impact of the changes described above for Japan’s real GDP and rate of unemployment. (20 marks) b) Suppose the government responds to what you have outlined in part (a) with a change in fiscal policy. What would the government be trying to achieve? Explain how this might impact on the stock of public debt. (10 marks)
Note: You need to demonstrate a detailed knowledge of the construction and use of the 45degree diagram and any other economic analysis you use. You must make it clear that you have a complete understanding of the macroeconomic principles that underlie the model and concepts. Explain what assumptions you are making. Above all, explain the economics of what you are describing. It will be very difficult to obtain a passing mark for this assignment if you do not provide a complete explanation of exactly how and why the economy responds in the way that you are describing.
Part (a) Assume prior to the exogenous changes identified in the quote, i.e., these changes are determined outside of the basic Keynesian model, the economy is at the initial equilibrium level of GDP denoted by Y* (full employment), illustrated in Figure 1. The initial equilibrium is characterised by an equivalency between planned aggregate expenditure, PAE, and...

...1. The Definition of utility in a marketing or economics context is perhaps best described as:
a. Reward value
b. Use value
c. Electricity
d. Cheap advertising
e. None of the above
2. What is meant by the term “early adopter”?
a. Someone taken into care at an early age
b. Someone who gets to the sales early
c. Someone who buys new products & technologies when they first come out
d. Someone who quickly learns how to put together self assembly equipment
e. Someone who makes a lot of use of social, interactive media
3. Which of the following is a theory of motivation we can use to analyze why we buy things (Maslow)?
a. Marconi’s Principle
b. Mustang Mayhem
c. Monterray Ladder
d. Maslow’s Hierarchy
e. Melissa’s Steps
4. If something is said to be pervasive it is:
a. Large and intractable
b. Contemporary and post-modern
c. Thoroughly penetrating or permeating
d. New and improved
e. Unwanted but unavoidable
5. In the lecture it was made clear that using marketing concepts and practices in charities is particularly challenging because charities operate with multiple _________.
a. Competitors
b. Government agencies
c. Publics
d. Promotional campaigns
e. Goals, aims and objectives
6. “The McDonaldization of society” means
a. The saturation of a market with fast food restaurants
b. The trend towards...

...PLEASE DO NOT WRITE ON THIS EXAMINATION FORM.
1. Which of the following statements is correct?
a. Real GDP is the total market value of the final goods and
services produced in America for sale in a year valued in the prices of 1992.
b. Your buying stock in the stock market is an example of investment spending
c. Potential Real GDP is always greater than Equilibrium Real GDP
d. Social security and welfare are examples of spending on infrastructure.
e. All of the above
2. The period of the business cycle in which real GDP is increasing is called the:
a. expansion b. peak c. recession d. trough e. stagflation
3. Assume that, in the population, 95 million people worked for pay last week, 5 million people did not work for pay but had been seeking a job, 5 million people did not work for pay and had not been seeking a job for the past several months, and 45 million were under age 16. The unemployment rate, given these numbers, is:
a. 5% b. 8% c. 10% d. 20% e. 45%
4. A type of unemployment in which workers are in-between jobs or are searching for new and better jobs is called _______ unemployment:
a. frictional b. cyclical c. structural d. turnover
5. Consider three consumer goods: 100 of Good A, 100 of Good B, and 100 of Good C. In the base year, Good A sold at a price of $1, Good B sold at a price of $1, and...

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Class Test 1 (Sample Items)
Choose the most correct response. Record your answer on the mark sense sheet provided. Each answer is worth ½ mark.
QUESTION 1
All else equal, a binding price floor will cause less of a surplus if:
(a) both supply and demand are inelastic
(b) both supply and demand are elastic
(c) supply is elastic, but demand is inelastic
(d) supply is inelastic, but demand is elastic
QUESTION 2
The figure shows the market for books before and after an excise tax is introduced. The tax on books is ________, buyers pay ______ of tax per book, and the governments tax revenue is ________ a week.
(a) $0.40 a book; $0.40; $4
(b) $1.20 a book; $0.80; $128
(c) $0.80 a book; $1.20; $12
(d) $1.20 a book; $0.80; $12
QUESTION 3
If the minimum wage is set below the equilibrium wage rate,
(a) a labour shortage occurs.
(b) there is no change in the quantity of labour employed.
(c) the short-run labour supply curve becomes more elastic.
(d) a labour surplus occurs.
QUESTION 4
If honey is measured on the vertical axis, and jam on the horizontal axis, the marginal rate of substitution:
(a) is the rate at which the consumer has to give up honey if more jam is to be bought, given their relative prices.
(b) is the rate at which the consumer has to give up jam if more honey is to be bought, given their relative prices.
(c) is the rate at which...